Foster Boosting Business to help tackle unemployment

Figures released today for the period June - August 2011 show that the Northern Ireland unemployment rate increased over the quarter to 7.6%.~ Wednesday, 12 October 2011

More recent figures for September 2011 show that the number of unemployment benefit claimants increased by 500 from the previous month’s revised figure.

Output from the Northern Ireland Production sector fell by 4.1% from Q1 2011 to Q2 2011. The UK decreased by 1.2% over the same period.

Output from the Northern Ireland Index of Services for the second quarter of 2011 showed that output levels rose over the quarter by 0.6%, but were still down 4.0% compared to the same quarter one year earlier. This is the first quarter-on-quarter growth recorded in six quarters, whilst the UK has experienced quarter-on-quarter growth in four of the last six quarters.

Commenting on the figures, Enterprise Minister Arlene Foster said:“The latest labour market figures record a further rise in unemployment levels throughout the UK. This is obviously disappointing news and there is clearly ongoing uncertainty in global economic and financial markets which is inhibiting recovery.

“This quarters decline in the production sector in Northern Ireland is only the second fall in output in the last eight quarters. However both the production and service sectors also remain well below their peak values.”

Arlene Foster continued: “It is clear from this month’s figures that, whilst our primary focus must remain on creating the higher value jobs that drive productivity and competitiveness, there remains a very real issue with getting people either back, or into, work.

“Invest Northern Ireland’s Short Term Employment Scheme is designed to do just that and, last month I was pleased to be able to announce that Capita is to create over 330 jobs through an investment which will help many families.

“The pipeline of projects is strong and I expect more announcements to be made in the coming weeks, from businesses large and small across Northern Ireland. However, we need to do more and, as part of Invest NI’s wider Boosting Business initiative, it has introduced a number of changes to encourage as many businesses as possible to take advantage of the support available.

“So, firstly, moving forward, the Short Term Employment Scheme will simply be known as The Jobs Fund, because that is exactly what it is – a ring-fenced £19m budget to support business owners to create the jobs that will tackle our current levels of unemployment.

“In order to encourage more applications from smaller businesses, we are introducing a slimmed down application process for offers of support up to £50,000 and introducing steps that will ensure that businesses which are able to create jobs, can receive the financial support earlier.

“So, whether a business owner can create two or two hundred jobs, the support is there.”

Notes to editors:

The superscript numbers throughout the bullet points refer to the relevant endnotes.

Labour Force Survey – Unemployment

The Northern Ireland seasonally adjusted unemployment rate2, as measured by the Labour Force Survey (LFS), was estimated at 7.6% for the period June - August 2011. This was up from the rate of 7.1% recorded in the previous quarter and was also up from the rate of 7.0% recorded one year ago. However, the Northern Ireland unemployment rate remained below the UK average rate (8.1%) and was also lower than the European Union (9.5%) and Republic of Ireland (14.5%) rates for July 2011.

Unadjusted LFS estimates for June - August 2011 show that 45.1% of those unemployed in Northern Ireland have been unemployed for one year or more. They also record the unemployment rate for 18-24 year olds at 18.1%.

Claimant Count Unemployment

The seasonally adjusted number of people claiming unemployment related benefits5 stood at 60,900 in September 2011 – up 500 (0.8%) from the previous month. The latest monthly increase in Northern Ireland (0.8%) compared to a monthly rise of 1.1% in the UK as a whole. Over the year, the Northern Ireland claimant count has increased by 5.2% (3,000), compared to an increase of 8.8% in the UK. The annual increase in Northern Ireland was the lowest among the twelve UK regions.

Labour Force Survey – Employment

Seasonally adjusted estimates for the period June - August 2011 showed that there were 799,000 people in employment in Northern Ireland. This estimate was down 0.4% on the previous quarter, but up 2.7% over the year.

Labour Force Survey – Economic Inactivity

The seasonally adjusted number of working age7 persons that were economically inactive increased by 4,000 (1.4%) over the quarter and the corresponding working age economic inactivity rate increased to 27.0% (in June - August 2011). The Northern Ireland inactivity rate (27.0%) remained above the UK average rate (23.3%) and was the highest rate among the twelve UK regions.

Unadjusted LFS estimates can provide information on the reason for economic inactivity. In June - August 2011 an estimated 32% of the economically inactive of working age in Northern Ireland were sick/disabled, 29% were students, 21% were looking after the family/home, 11% were retired and 6% were ‘other’ reason.

Redundancies

65 confirmed redundancies8-10 were notified in September 2011, compared to 93 in August 2011 and 191 in September 2010. There has been a 34% decrease in the number of confirmed redundancies over the last year to 30th September 2011 – 1,756 compared to 2,653 in the previous year.

Production sector output

Provisional results from the Index of Production (IOP) for the second quarter of 2011 reported a decrease of 4.1% over the quarter and a rise of 1.2% when compared to the same period one year earlier. The equivalent UK figures show that output over the quarter decreased by 1.2% and decreased by 0.9% over the year. However, the NI Index remains significantly below (-18.9%) the peak recorded in Q4 2007. The UK index fell by 10.6% over the same time period.

Service sector output

Provisional results from the Index of Services for the second quarter of 2011 showed that output levels rose over the quarter by 0.6% but were still down by 4.0% compared to the same quarter one year earlier. This was primarily due to growth in Business services and finance and in Transport, storage, information and communication which has offset falls in the Wholesale and retail distribution and accommodation and food service activities and Other services sectors. The UK reported an increase in service sector output of 0.2% over the quarter and 1.0% over the year.

This was the first quarter-on-quarter growth recorded in six quarters whilst the UK has experienced quarter-on-quarter growth in four of the last six quarters. Over the latest four quarters Northern Ireland service sector output decreased by 4.2% compared to the same four quarters one year earlier. This contrasts with an increase for the UK(1.0%) over the period, compared to the previous four quarters.

This quarter the index is published using an updated industry classification to reflect changes in the nature of economic activity (using STANDARD INDUSTRIAL CLASSIFICATION 2007 (SIC07) rather than SIC 2003). As the coverage of the Index (and the broad industry groupings) is different between SIC03 and SIC07 it is not possible to compare the results provided in this bulletin with those published in July 2011. Previous data for Q1 2011 and earlier have been converted to approximate the SIC07 coverage and are therefore not strictly revisions. It should be remembered that as the IOS and the IOP coverage has changed this is not a like-for-like comparison.

The index remains some 13.5% below the peak recorded in Q3 2007, whilst the UK index decreased by 2.2% in the same time period. Whereas previous results indicated that the output for the service sector peaked in Q3 2006, this quarter’s figures (utilising transfer to SIC07) indicate that output in Northern Ireland reached a high point in Q3 2007 and has gradually decreased since then, until the most recent quarter.

Endnotes:

1. From the 1st April 2011, the responsibility for the collection of data and production of official labour market and economic statistics transferred from the Department of Enterprise, Trade and Investment to the Northern Ireland Statistics and Research Agency (DFP). This transfer mirrored the position in Great Britain where most business surveys and labour market data collection and statistical production have been transferred from the departments with policy responsibilities to the Office for National Statistics (ONS). However, it is important to note that there are no planned changes to the production of economic and labour market statistical publications and outputs as a result of the transfer.

3. The official measure of unemployment is sourced to the LFS and refers to people without a job who were available for work and had either looked for work in the four weeks prior to interview or were waiting to start a job they had already obtained. This definition is consistent with that recommended by the International Labour Office. Unemployment estimates for the European Union and the Republic of Ireland are sourced to EUROSTAT.

4. The figures released today contain data from a number of different sources. The unemployment, employment and economic inactivity rates are sourced to the LFS and refer to the period June - August 2011. It should be noted that the LFS figures are estimates, which are subject to sampling error. This means that the exact figure is likely to be contained in a range surrounding the estimate quoted. For example, the exact number of unemployed persons is 95% likely to fall within +/- 11,000 of the quoted estimate.

5. The Claimant Count measure of unemployment relates to September 2011 and is based on claimant data from Jobs and Benefits Office Administrative Systems.

6. Not all those who register for unemployment benefits meet the criteria for LFS unemployment. Conversely, not all those defined as unemployed in the LFS are eligible for unemployment benefits. Estimates of the numbers unemployed may also differ between the two sources due to timing differences.

Please note that there are no implications for the headline unemployment rate, which will continue to be based on the economically active population aged 16 and over.

8. Under the Employment Rights (Northern Ireland) Order 1996 companies are only legally required to notify of impending redundancies of 20 or more employees. Any estimates provided are therefore likely to be an underestimate of total job losses, though it is not possible to quantify the extent of the shortfall.

9. Subject to the criteria mentioned above, employers must notify the Department of a) redundancies proposed and b) redundancies confirmed. Where redundancies occur, the confirmed total provides a better indication of real job losses since all proposed redundancies do not actually take place.

10. Redundancies do not necessarily equate to job losses, for example, employees who do not qualify for a redundancy package; those on temporary contracts are not incorporated in redundancy estimates.

11. The Production and Service Sector Output measures relate to the second quarter (April - June) of 2011. These estimates are based on surveys of businesses and estimates of change are subject to sampling error. Figures for a quarter may be revised if more complete information subsequently becomes available. For the first time results are published on a Standard Industrial Classification 2007 basis (the previous classification was 2003). Further details can be found at:

12. The ‘Other Services’ sector includes education, health and social work, arts, entertainment and recreation and other services.

13. Details of sampling errors, together with more detailed statistical information and definitions of the methodology used, can be found in the Labour Market Report (LMR) bulletin, which is available on the following website: http://www.statistics.detini.gov.uk/